Key Points
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It helps when investors have a unique reason to buy a given cryptocurrency.
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Cardano has developers hard at work, but it’s still a solution looking for a problem.
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Shiba Inu is a cute dog meme coin that attempts nothing and solves nothing.
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10 stocks we like better than Cardano ›
Everyone wants to believe that the next coin they buy will vault from pocket change to private-jet territory. Two popular hopefuls today are Cardano (CRYPTO: ADA) and Shiba Inu (CRYPTO: SHIB). Both enjoy large and enthusiastic online followings, and plenty of social media oxygen.
But do they really have the right ingredients to turn a modest stake into seven figures any time soon? And which is more likely to accomplish that very ambitious goal?
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Traction matters here
Cardano’s market cap is near $31 billion today, up by nearly double during the past 12 months, keeping it safely in the list of crypto’s top 10 largest coins. That heft alone makes a 100-fold price explosion very hard to imagine. Reaching a $3.1 trillion valuation would be required to mint new millionaires from a hearty $10,000 stake. So from the get-go, the odds are not favorable here.
Under the hood, the network is still somewhat busy, but nowhere near busy enough.
Its daily active wallet addresses average roughly 38,000, a figure that just rose 38% after a Cardano-branded debit card rolled out. But it still looks puny compared to its larger and more favored competitors, like Solana, which has 500,000 daily active wallet addresses, and Ethereum, which has 400,000.
Decentralized finance (DeFi) data tells a similar story here. Cardano controls barely 0.3% of the sector’s total value locked (TVL), despite multiple lending protocols launching on the chain during the past year. So there is not so much hope that a gargantuan DeFi boom like 2017’s or 2021’s could save the day and make this coin a millionaire-maker on its own.
Image source: Getty Images.
Still, Cardano’s tech development activity looks healthy, at least on paper. The chain currently has 3,513 annually active developers, which is good for holding 12th place across all chains. But headcount alone does not guarantee popular apps or fee growth.
In fourth-quarter 2024, Cardano’s quarterly network revenue was only $1.8 million, versus Ethereum’s $552 million for the same period. Furthermore, more recently, its application revenue for the 24-hour period ended at noon on July 22 was just $24,190, a negligible amount.
The biggest problem is that it isn’t clear which growth segments Cardano might compete in to gain value, never mind gaining enough value to make investors rich. It’s slower and more expensive to use than Solana, it has a much smaller capital base for DeFi than Ethereum, and it isn’t exactly a favorite among institutional investors, either.
Therefore, investors should temper their expectations. Cardano may grind higher during the next decade if it somehow manages to spark real adoption, but the probability of a 100-fold rocket ride from today’s valuation is very, very slim.
Memes aren’t a realistic path to millions
Shiba Inu’s odds of making millionaires out of investors are also quite slim.
Its market cap sits near $9 billion, which is already larger than many mid-cap stocks. The calculation here is thus that for an investor with $10,000 to allocate, the dog coin would need to reach a market cap of about $900 billion with a clean 100-fold move. The math looks more favorable than it does for Cardano, but that’s not to imply that there is any realistic chance of such a large move happening.
Simply put, the coin has no real utility, and no direct way of attracting more capital.
The Shibarium, the project’s Layer-2 (L2) chain, has indeed logged more than 1 billion cumulative transactions, and 1.7 million wallets, though most are inactive. However, total value locked on the network is only about $1.8 million, down from its March peak of $4.5 million. That is pocket change in DeFi land.
Developer momentum also lags. Public GitHub trackers show a negligible number of commits of new code across the project’s main repositories during the past year, and practically zero on a weekly and monthly basis. That contrasts sharply with blockchains that add features monthly and court institutional capital. There is not any chance of either of those happening in significant volume.
It’s also true that meme coin power can move prices in the short run, especially when macroeconomic and liquidity conditions are frothy. Yet for long-term investors, community buzz without a shrinking supply or robust fee engine seldom ends in sustained wealth, and there’s not much to hope for here.
Therefore, Cardano is more likely to make investors richer. It at least has an active developer base, and a modest sum of capital for DeFi. For investors, the important takeaway here is to commit your capital to coins like Ethereum or Solana, which are winning at something the market considers valuable.
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Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.
